Chancellor George Osborne announced fresh spending cuts for several government departments on Monday in the wake of his embarrassing defeat in the House of Lords on tax credit cuts.

The environment, transport, local government and finance departments will have their day-to-day budgets, excluding capital expenditure, cut by an average 8 percent each year for the next four years, Osborne said.

The Chancellor insisted bringing the deficit down is essential for Britain’s economic security.

However, Shadow Chancellor John McDonnell described the policy as a “tactical ploy” to put pressure on Work and Pensions Secretary Iain Duncan Smith to cut Universal Credit for people on low incomes or out of work.

In his speech on Monday, Osborne said the country must not “lose its nerve” in the face of another round of austerity.